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Apr-26-2008Nigerian Oil Output Falls Further on Attack, Strike(topic overview)
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Oil also found support from a Nigerian workers strike at Exxon Mobil that forced the company to shut down some 200,000 barrels per day of crude oil output, a senior union official said. Exxon has surpassed Royal Dutch Shell as the top foreign oil producer in Nigeria after Shell was struck by repeated militant attacks on its facilities. Nigerian rebels said on Friday they had sabotaged an oil pipeline in the Niger Delta belonging to Royal Dutch Shell late on Thursday. [1] LAGOS (Reuters) - A strike by workers and attacks by rebels have forced Nigeria's two biggest oil firms, Exxon Mobil and Royal Dutch Shell, to shut in some production, keeping world oil prices near all-time highs on Friday. Exxon Mobil (XOM.N: Quote, Profile, Research ), Nigeria's leading producer, started closing down its output because of a strike by workers over a labor dispute, with one union official saying 200,000 barrels per day of crude were already shut in.[2]
Militant attacks have increased, while production has fallen and global crude prices have spiked. Feeling the sting of recent attacks on its installations in the oil-rich Niger Delta, Royal Dutch Shell said Wednesday it might not be able to honor contracts for April and May because of decreased production levels. The leading foreign oil producer in Nigeria said its output was off by 169,000 barrels per day because of the increased attacks by militant groups.[3] Industrial action and attacks from militants have forced the two biggest oil companies in Nigeria to cut their production. Exxon Mobil and Royal Dutch Shell are both reducing output, which is helping to keep oil prices near record highs. Militant groups in the Niger Delta have blown up a section of a Shell pipeline, in the fourth such attack in the last seven days.[4] Oil prices surged ever closer to the US$120 a barrel mark after the main militant group in southern Nigeria said Friday it had sabotaged another pipeline. The Royal Dutch Shell PLC joint venture in Nigeria confirmed that one of its pipes had been hit, and the Movement for the Emancipation of the Niger Delta promised more violence. "Our candid advice to the oil majors is that they should not waste their time repairing any lines as we will continue to sabotage them," the militants said in an e-mail statement announcing the Thursday attack.[5] Three militant groups, including Hamas, Islamic Jihad and a violent offshoot of President Abbas' moderate Fatah movement have claimed responsibility for the attack. In a statement, the militant group said its fighters sabotaged an oil pipeline in southern Rivers State, belonging to the Royal Dutch Shell joint venture, late on Thursday, reported AP. If confirmed by the Shell group, Thursday's bombing of the oil pipeline would be the fourth of its kind in the past week. The militant group said that it would continue sabotaging oil pipelines until the Nigerian government shares more of its oil revenue with the people of the southern Niger Delta, who remains poor despite the region being home to Africa's largest oil industry.[6] The IAEA chief said that the reports suggested that the reactor was not yet operational when it was destroyed in the Israeli air raid in September 2007. "According to this information, the reactor was not yet operational and no nuclear material had been introduced into it," ElBaradei said in the statement. The Movement for the Emancipation of the Niger Delta, the main militant group behind a recent string of attacks in Nigeria's southern oil region, said in a statement that its fighters hit a pipeline late Thursday in southern Rivers State. This is the fourth pipeline the group claimed to have blown up in the past week.[7] The main militant group responsible for a string of recent attacks in Nigeria's southern oil-producing Niger Delta region says it has sabotaged another pipeline belonging to the British-Dutch Shell oil company. In an e-mailed statement, the Movement for the Emancipation of the Niger Delta says its fighters attacked the pipeline late Thursday. It would be the fourth Shell pipeline the group has attacked this month.[8]
About 90 percent of Exxon's Nigerian output of about 850,000 barrels a day is halted, said Olusola George-Olumoroti, chairman of the branch of the Petroleum & Natural Gas Senior Staff Association of Nigeria, or Pengassan, that's taking action against Exxon. He expects all the company's production to be halted by the end of the day. "We're still trying to work through it,'' Ajumogobia said today, after meeting with Pengassan officials, adding that he hoped to resolve the matter "soon.'' Elsewhere in Nigeria's southern oil region, armed militants belonging to the Movement for the Emancipation of the Niger Delta, or MEND, said they sabotaged a pipeline belonging to Shell's Nigerian unit, the latest of several such bombings this month.[9]
MEND is the main militant group behind a series of recent attacks in Nigeria's southern oil region. Shell said earlier this week that it had shut in about 170,000 barrels a day of Nigerian production due to one of the earlier attacks. Adding to supply concerns, BP PLC is also considering shutting down its 700,000 barrel-a-day Forties pipeline system if a strike continues at a U.K. refinery.[10] LONDON (AP) — Oil prices rose Friday, largely reversing an earlier $2 a barrel drop, after a militant group behind recent attacks in Nigeria's southern oil region said it had sabotaged another pipeline and a strike hit Exxon Mobil production in Africa's biggest exporter.[11]
Industrial action and attacks by militant groups have forced the two biggest oil companies in Nigeria to cut back production. On Friday a section of a Shell oil pipeline was blown up, the fourth such attack in just a week. On top of this Nigerian workers at the U.S. oil giant Exxon Mobil began a strike over pay and conditions.[12] April 25 (Bloomberg) -- Nigeria is losing about 50 percent of its current oil production because of a strike at Exxon Mobil Corp.' s operations in the country and militant attacks on a Royal Dutch Shell Plc pipeline, the country's oil minister said. Petroleum Minister of State H. Odein Ajumogobia said in an interview in Abuja that he held a meeting with union leaders today in an effort to end an oil workers union strike against Exxon Mobil's Nigeria unit. He said he expects to hear back from the union this evening. "I don't know what's driving this new wave of militancy,'' Ajumogobia said of the attacks. "It's one day.[9] The Movement for the Emancipation of the Niger Delta promised further violence. "Our candid advice to the oil majors is that they should not waste their time repairing any lines, as we will continue to sabotage them", the militants said in a statement. ExxonMobil and Royal Dutch Shell are both reducing their oil production in Nigeria. Nigeria has lost about half of its oil production amid a strike and rebel attacks, Petroleum Minister of State H. Odein Ajumogobia said in an interview with Bloomberg News.[13]
Shell has been forced to shut 169,000 barrels per day of Bonny Light crude oil production after a pipeline attack in the Delta a week ago, and has said it is assessing the damage from two further strikes on Monday. It has declared force majeure on Bonny Light exports for the rest of April and May, meaning it cannot guarantee to meet its contract commitments, although it has said some barrels would still be exported while the measure is in place. "Our candid advice to the oil majors is that they should not waste their time repairing any lines as we will continue to sabotage them," MEND said in an emailed statement.[14] MEND, which resumed violent attacks on the oil industry last week, sabotaged two Royal Dutch Shell pipelines on Monday, in what it called an act of defiance against the United States, a major oil consumer whose navy is currently conducting joint training with the Nigerian navy. The strikes followed a similar attack last Thursday which forced Shell to shut 169,000 barrels per day of oil output and declare force majeure on Bonny Light crude exports for the rest of April and May -- meaning it could not guarantee to meet its contract commitments. Militants had previously said they wanted to see how Okah's trial was conducted before resuming their armed struggle.[15]
Shell announced a production loss of 169,000 barrels per day following earlier attacks on pipelines in the region. Royal Dutch Shell, the largest oil operator in Nigeria, accounting for about half of the country's 2.1 million barrels per day output, has seen a wave of attacks on its facilities in recent months.[16] Royal Dutch Shell has confirmed an output loss of 169,000 barrels per day in Nigeria, revealed media reports. According to Reuters, the company confirmed its outage in Nigeria after the country's oil minister, Odein Ajumogobia, said the figure was very big. Mr Ajumogobia said that figures for production outage he had accounted for was around 25,000-30,000 barrels per day. He also stated that this could be soon brought back.[17]
A strike by workers at Exxon Mobil, Nigeria's biggest foreign oil producer, has further disrupted production in the African country. It said it had been forced to halt its output of crude oil, estimated at 200,000 barrels per day.[18] White-collar workers at Exxon Mobil Corp. — one of the largest producers in Nigeria, with an output of about 2 million barrels a day of crude oil — have "commenced a safe and orderly shut-in of production" to push for more pay, the company said in a statement.[11]
Nigeria is expected to lose around 50 percent of its current oil production as strike by workers and attacks by rebels have forced its two biggest oil firms, Exxon Mobil and Royal Dutch Shell, to close its oil production, pushing oil prices near all-time high on Friday. Get stories by e-mail on this topic.[19] The BBC reported Saturday that two of the nation's biggest oil producers -- Exxon Mobil and Royal Dutch Shell -- have cut production in part because of attacks from militants.[20]
MEND said the pipeline belongs to a Royal Dutch Shell PLC joint venture. A Shell spokesperson confirmed one of its pipelines had been hit, but provided no additional details. Earlier this week, Shell said an attack cut its Nigerian oil production by about 170,000 barrels a day.[21] "We are working with the Nigerian government to resolve outstanding issues and to minimize any supply impacts," Exxon said in a statement. Rebels in the infamous Niger Delta attacked a major Royal Dutch Shell oil pipeline late Thursday, making it the fourth attack this week. "I dont know whats driving this new wave of militancy, Ajumogobia said of the attacks. "Its one day.[19] All output (from Exxon's Nigerian oilfields) is affected," an Exxon official, who asked not to be named, said. Rebels in the Niger Delta meanwhile attacked a major oil pipeline belonging to Royal Dutch Shell (RDSa.L: Quote, Profile, Research ) late on Thursday, the fourth such attack in a week.[2]
LAGOS, April 25 (Reuters) - Nigerian rebels said on Friday they had sabotaged an oil pipeline in the Niger Delta belonging to Royal Dutch Shell (RDSa.L: Quote, Profile, Research ) late on Thursday, the latest in a series of attacks in the region.[14]
LAGOS (Thomson Financial) - The Movement for the Emancipation of the Niger Delta (MEND), the main armed group in the south of Nigeria, confirmed on Friday it was responsible for the sabotage of a Royal Dutch Shell pipeline on Thursday, some four days after its initial attack on the oil major.[22] In an e-mail to AFP the Movement for the Emancipation of the Niger Delta (MEND) said it had "successfully sabotaged a major crude oil pipeline located at Kula river in Rivers state of Nigeria operated by Shell Petroleum Development Company" on Thursday. Shell spokesman Tony Okonedo confirmed the attack later Friday but said he could not comment on the extent of the damage. MEND said after the blast, its "fighters ran into a docked joint military patrol boat but were astonished that instead of a confrontation, the soldiers in the patrol boat urged them on and lamented about having to defend what is unjust."[23] The Movement for the Emancipation of the Niger Delta (MEND) has again crippled the crude oil pipeline at Kula River operated by Shell Petroleum Development Company in Akuku Toru Local Government Area, Rivers State. They warned that they will not stop the attacks until their leader who they did not name, but supposedly is Henry Okah, is released.[24]
MEND had earlier attacked Adamakiri and Soku pipelines in Abonnema. When THISDAY contacted Mr. Tony Okonedo, Shell new spokesman in Lagos, he confirmed that the pipelines at Kula has been attacked but would not name those responsible for the attack. In a statement posted to THISDAY from its official website, MEND warned oil companies not to embark on repairs on the damaged pipelines or they would be creating more places for them to test their explosives. The statement claimed that after their explosive experts had destroyed the pipelines, they ran into soldiers on patrol who, rather than confront them, urged them on, saying they were not ready to support injustice. The MEND statemenrt read; 'On Thursday, April 24, 2008 at 2218 hours, heavily armed fighters from MEND provided cover for its detonation engineers who successfully sabotaged a major crude oil pipeline located at Kula River in Rivers State of Nigeria, operated by Shell Petroleum Development Company. 'MEND uses this opportunity to thank its numerous sympathisers in the military, oil industry and oil producing communities for facilitating the success of the on-going Operation Cyclone (the crippling of the entire Nigerian oil export industry).'' This attack is dedicated to the Rivers state governor, Mr. Rotimi Amaechi who boasted to the Financial Times that our past successes were attributed to the absence of patrol boats undergoing servicing. We waited for the patrol boats to return back in service before carrying out this attack to proof a point. 'Our candid advice to the oil majors is that they should not waste their time repairing any lines as we will continue to sabotage them.[24]
Unrelenting attacks on its oil installations by militants, sabotage of oil pipelines and increasing shutdown in production may for Shell Petroleum Development Company (SPDC) to relocate its operations out of Rivers State. Already the company is loosing 160,000 barrels of crude oil at its fields at Soku and Abonema Alakiari where some militants struck recently.[25]
LAGOS, Nigeria (AP) — Militants say they have sabotaged an oil pipeline in Nigeria's south. The Movement for the Emancipation of the Niger Delta says its fighters hit a pipeline late Thursday in southern Rivers State. That brings to four the number of pipelines the militant group claims to have blown up in the past week.[26] "Supply concerns will still underpin oil pricing," Shum said. In Nigeria, The Movement for the Emancipation of the Niger Delta, or MEND, said Friday its fighters hit a pipeline late Thursday in southern Rivers State. That brought to four the number of pipelines the group has attacked in the past week.[10] The contract had dropped $2.24 in the previous session to settle at $116.06 a barrel. In Nigeria, the Movement for the Emancipation of the Niger Delta, or MEND, said Friday that its fighters hit a pipeline late Thursday in southern Rivers State. That brought to four the number of pipelines the group has attacked in the past week.[11]
Oil prices were up even before the gulf report as traders digested news of a pipeline attack in Nigeria and a looming refinery strike in Scotland. In Nigeria, the Movement for the Emancipation of the Niger Delta, or MEND, said its fighters hit an oil pipeline late Thursday, the fourth conduit the group has attacked in the past week.[21] The combination of strike-related outages and militant activities was an unusual coincidence in Nigeria, pushing the price of oil over US$119 a barrel on the New York Mercantile Exchange. The militant group, the Movement for the Emancipation of the Niger Delta, says it is fighting to force the government to give more oil industry revenue it controls to its region, which remains deeply poor despite four decades of oil production in the area.[5] The self-styled Movement for the Emancipation of the Niger Delta has kidnapped nine western oil workers and attacked several oil production facilities operated by the energy giant Shell over the past month. The Nigerian rebel group Movement for the Emancipation of the Niger Delta (MEND) solicited his help in mediating between it and the Nigerian government in a letter addressed to President Bush sent out earlier this week by the group's spokesman, Jomo Gbomo. "Mr. Carter is not in denial as the rest of you who brand freedom fighters as terrorists, forgetting their integral role in any substantial peace process just as he has demonstrated in his meeting with Hamas," said Gbomo.[27]
Industrial action and attacks on pipelines by Nigerian militants have forced the two biggest oil companies in the country to cut production. Militant groups in the Niger Delta have blown up a section of the Shell pipeline, in the fourth such attack in the last seven days, BBC reported.[13]
Since then MEND and other militant groups and gangs have repeatedly pledge to quell the violence only to return to attacking high-valued oil installations, disrupting production in Africa's largest oil producer and contributing to global price increases, according to analysts. Mark Schroeder, regional director for Sub Saharan Africa at the Stratfor consulting firm, noted that the MEND leader's arrest "seems to have riled his loyalist and contributed to the recent violence" in the delta. "They've (MEND) always issued their threats (to disrupt oil production), but this time the focus of the attacks are much more specific," Schroeder told United Press International.[3] Since the 1970s, Nigeria, Africa's No. 1 oil producer, has pumped more than $300 billion worth of crude from the southern delta states, according to estimates. High unemployment in the delta, environmental degradation due to oil and gas extraction, and a lack of basic resources such as fresh water and electricity have angered the region's youth, who have taken up arms, many times supplied by political leaders, and formed militant groups and local gangs.[3]
LAGOS, Nigeria (AP) - A militant group behind a string of recent attacks in Nigeria's southern oil region says it's sabotaged another pipeline.[28] LAGOS (AFP) — The most prominent armed group in Nigeria's oil-producing south said Friday it had sabotaged a supply pipeline belonging to Anglo-Dutch oil group Shell, the latest of several attacks in recent weeks.[23]
Nigeria is the world's eighth largest oil producer. The BBC said militiamen in the Niger Delta have blown up a section of a Shell pipeline, in the fourth such attack in the last week.[20] "The Movement for Emancipation of the Niger Delta (MEND) has once again announced that it sabotaged an oil facility belonging to Royal Dutch Shell, following a series of attacks started at the end of last week."[16] Recently, the Movement for the Emancipation of the Niger Delta (MEND) commenced attacks on oil facilities belonging to the SPDC in Rivers State. In an electronic statement signed by its spokesman, Jomo Gbomo, the MEND said it has called off the ceasefire it declared recently and therefore commenced attacks on SPDC oil installations as well as that of other oil companies.[25] The Movement for the Emancipation of the Niger Delta (MEND) said it had used explosives to attack the pipeline at Kula river in Rivers state.[14]
According to the SPDC spokesman, the recent attack on the company's oil field in Asari-Toru Local Government Area of Rivers State would also make lifting of oil at the Bonny terminal impossible, owing to SPDC's position on the matter. The company equally recounted several attacks on its operational oil fields in other states of the Niger Delta, insisting that, "our operations have been affected by militants' activities in the region".[25]
The Movement for the Emancipation of the Niger Delta promised continued attacks. "Our candid advice to the oil majors is that they should not waste their time repairing any lines, as we will continue to sabotage them," the militant group said in a statement.[20] Shell had no immediate comment. "Our candid advice to the oil majors is that they should not waste their time repairing any lines as we will continue to sabotage them," the Movement for the Emancipation of the Niger Delta said in an emailed statement.[29]
The Movement for the Emancipation of the Niger Delta (MEND) militant group, active in the west African country's oil-rich south, claimed responsibility for an attack on Shell's key Bonny terminal in an e-mail on Monday.[30] The decision to try rebel chief, Henry Okah in secret has angered militants of the Movement for the Emancipation of the Niger Delta (MEND), who have launched a series of attacks in recent days.[15]
The Movement for the Emancipation of the Niger Delta has claimed responsibility for at least three attacks on Shell installations including a facility at the Bonny terminal, causing the 169,000 bpd shortfall. MEND said it was stepping up its attacks because of the arrest of one of its most prominent leaders, who is facing trial by a secret commission on several charges including weapons trafficking and treason.[3]
The Movement for the Emancipation of the Niger Delta has repeatedly tried to sabotage Shell's production in recent weeks.[18]
Oil companies in Nigeria have seen a fall in production, because of militant attacks in the Niger Delta.[31] LONDON -- Oil production in Nigeria, Africa's biggest exporter, sustained serious setbacks Friday as another militant attack on a pipeline and a union strike shut a big chunk of the country's production and pushed world crude prices higher.[32] Oil prices rose above $119 a barrel as oil giant BP prepared to shut down a key North Sea pipeline and a strike at Exxon in Nigeria disrupted production.[18]
Exxon Mobil's Nigeria unit began an "orderly shut in of production'' after workers from one of the country's biggest oil unions went on strike yesterday, Gloria Essien-Danner, a spokeswoman for the Exxon unit, said. She declined to say how much production was affected by the action.[9] Exxon Mobil, Nigerias leading producer, shut down its oil output after a strike by workers over a labor dispute broke out.[19]
Nigerian Minister of State for Energy Henry Odein Ajumogobia met with union leaders today in an attempt to end an oil workers union strike against Exxon Mobils Nigeria unit.[19]
LONDON (Reuters) - Oil climbed above $119 a barrel on Friday after a workers strike cut production in Nigeria and tensions rose between the United States and Iran.[33] Demand is high for Nigerias light, sweet crude. Its easily refined and emerging economic superpowers China and India are increasingly seeking oil supplies from Nigeria, which is the fifth largest outside supplier of crude to the United States. With demand high, Nigerias output is dropping and the country is about 25 percent off its official production capacity of 2.5 million barrels per day, after years of militant attacks.[5] Recent Nigeria outage ""not significant"": oil minister ROME (Reuters) - Recent disruption to Nigerian oil production from rebel attacks was not significant, Nigerian Minister of State for Oil Odein Ajumogobia said on Tuesday. ""It's not a significant disruption,"" he told reporters, adding that the latest, more accurate figures he had accounted for around 25,000-30,000 barrels per day affected, which could be brought back quickly.[34]
The development helped push world oil prices to around 120 dollars a barrel. Shell, Nigeria's largest oil operator accounting for around half of the country's 2.1 million barrels per day output, has seen a wave of attacks on its facilities in recent months.[23]
About 500,000 barrels per day of Nigeria's daily oil output cannot be accessed, because of security issues in the Niger Delta.[31] Before stepped-up hostilities by militant and other armed groups in the Niger Delta beginning in late 2005, Nigeria produced about 2.5 million barrels per day.[3]
Union officials warn the strike at Mobil Producing Nigeria could cripple oil exports if not resolved quickly. The company is playing down such fears, insisting there is no disruption to its oil production of 780,000 barrels per day.[31] Oil production in Nigeria is about 25 percent below the official capacity of 2.5 million barrels a day.[20]
One of the largest oil producers in Nigeria, Exxon Mobil has a crude output of about 2 million barrels a day.[7] An Exxon Mobil local joint venture is 1 of the largest producers in Nigeria with an output of about 2 million barrels a day in crude oil.[28]
Production is now running about 25% short of the official capacity of 2.5 million barrels a day. Exxon Mobil said it was operating at "partial production" following the industrial action, while Shell said it may not be able to meet its target of shipping 169,000 barrels a day from the country over the next few weeks, after the militants' attacks.[4] A spokesman for Shell confirmed the incident without divulging any details. Shell, one of the main operators in the country, announced after the previous three attacks that it may not be able to meet its obligations to ship about 169,000 barrels per day from Nigeria over the next few weeks.[7] Since Okahs arrest, the group has not launched any of the coordinated, military-style armed raids on staffed facilities that originally made it notable. Shell confirmed three attacks over the past week, and announced it may not be able to meet its obligations to ship some 169,000 barrels per day from Nigeria over the next few weeks.[5]
Ajumogobia was asked to comment on the figure of 169,000 barrels per day of Bonny Light crude that a Royal Dutch Shell spokesman said on Monday was shut in by pipeline sabotage last week. ""Initially they said 250,000 but it was not so,"" he said.[34]
Shell has been forced to shut 169,000 bpd of Bonny Light crude oil output after a pipeline attack there a week ago. In the North Sea, BP said it had begun shutting down UK's Forties oil pipeline in preparation for a planned strike at a major Scottish refinery this weekend.[33] BP's Forties pipeline, which provides a third of the UK's daily oil output, will close if a two-day strike by refinery workers goes ahead.[18] The planned walk out by 1,200 workers over pay and pension conditions at the British Grangemouth refinery on Sunday and Monday will force the closure of a pipeline delivering nearly half of the UK North Sea oil output, The Herald reported.[13]
LONDON (Reuters) - Oil rose to nearly $118 a barrel on Friday as strikes by workers caused major supply disruptions in Nigeria and the North Sea.[29] Oil also found support from a significant cut in Nigerian production due to a workers strike and rebel attacks.[33] Nigerian office workers at a subsidiary of the U.S. oil company ExxonMobil have started a strike over a pay dispute.[31]
In Britain, one of the country's biggest oil refineries shut down Friday ahead of a strike over pensions. The Grangemouth plant, west of Edinburgh in Scotland, was shut down by owners Ineos ahead of the planned strike action by its 1,200 workers on Sunday and Monday.[16] In the past, strikes declared by PENGASSEN and its sister union, the National Union of Petroleum and Gas Workers, have delayed some of Nigeria's oil exports, the eighth-largest in the world.[31]
With oil prices near all-time highs, militants seeking more funds for their impoverished region and workers hoping for a pay raise used high prices as political leverage to achieve their aims dealing a rare double blow to Nigerias oil industry.[5] Oil prices shot to a record $118.05 dollars on the New York contract as traders seized on the unrest in key producer Nigeria, the weak U.S. currency and OPEC's refusal to increase production.[30] NEW YORK (AFP) — Oil prices soared toward this week's record peaks Friday as traders fretted over threats to global energy supplies in Nigeria and Britain, analysts said.[16]
Analysts warn new concerns about disruptions in Nigeria could trigger even higher world oil prices.[31]
SINGAPORE (AP) — Oil prices rebounded Friday from the previous session's steep drop, fueled by supply concerns after a Nigerian militant group reported that it sabotaged another oil pipeline.[10] In London, Brent North Sea crude for June rose 2.00 dollars to settle at 116.34 dollars a barrel, after crossing 117 dollars for the first time to hit a record intraday peak of 117.56 dollars. Oil prices rocketed to historic highs this week as investors seized on mounting supply worries and the weak U.S. currency, which makes dollar-priced crude cheaper for buyers using other currencies and tends to encourage demand.[16] Oil prices had initially extended Thursday's decline of more than $2 a barrel, with a stronger U.S. dollar prompting investors to book profits.[10]
""I think the figures that I am giving you are more accurate."" The minister, attending the Internation Energy Forum of energy producing and consuming nations, said that oil market fundamentals did not justify record high oil prices at around $118 a barrel ""Clearly nothing has happened in the supply/demand equation to warrant this,"" he said. ""There are factors other than the fundamentals that are driving this -- I think that's the consensus among producers and consumers at this meeting.""[34]
The Nigerian supply losses helped push June crude oil futures as high as $119.55 a barrel on the New York Mercantile Exchange. This article is copyrighted by International Business Times.[19] Light, sweet crude for June delivery on the New York Mercantile Exchange rose 74 cents to $116.80 a barrel in electronic trading by late afternoon in Singapore. It fell as low as $114.51 a barrel earlier. With the dollar still strengthening, though, it remains to be seen if oil will resume its march toward $120 a barrel. Investors see commodities such as oil as a less effective hedge against inflation when the dollar strengthens.[10]
New York's main oil futures contract, light sweet crude for delivery in June, surged 2.46 dollars to close at 118.52 dollars a barrel.[16]
Light, sweet crude for June delivery leaped to $119.55 (U.S.) a barrel before the contract retreated to settle up $2.46 at $118.52 on the New York Mercantile Exchange.[21] Light, sweet crude for June delivery climbed $1.89 to $117.95 a barrel in electronic trading on the New York Mercantile Exchange by midday in Europe.[11]
Before news of the pipeline attack, it had fallen as low as $114.51 a barrel. [11] Recent attacks on Shell-run pipelines, including the latest one, is cutting oil flows by about 140,000 barrels a day, Ajumogobia said.[9] NIGERIAN oil minister Odein Ajumogobia said on Tuesday that there would be "no significant" interruptions to oil supply following a pipeline attack in Africa's top oil producer.[30] Nigeria, Africa's leading oil producer, pumped 1.96 million barrels a day in March, according to Bloomberg estimates.[9]
MEND had already claimed responsibility for the sabotage of two Shell pipelines at Isaka River and Abonnema River, also in Rivers state, as part of 'Operation Cyclone', which is aimed at destroying Nigeria's oil export industry.[22] The attack, in Rivers State, was part of MEND's 'Operation Cyclone' which the group said was "aimed at crippling Nigeria's oil export industry".[30]
Explosives were detonated by MEND fighters at the oil pipeline at Kula in Rivers state at about 10:18 p.m. local time yesterday, according to an e-mailed statement from MEND, received today.[9] "Efforts are being made around the clock'' to fix the Shell pipelines, Ajumogobia said. "Our candid advice to the oil majors is that they should not waste their time repairing any lines as we will continue to sabotage them,'' MEND spokesman Jomo Gbomo said in the statement.[9] No official at Shell was available for comment on MEND's latest claim on Friday. MEND advised oil companies 'not to waste their time' repairing oil pipelines, warning it will continue to sabotage them.[22]
In a message to Agence France-Presse, MEND said it successfully attacked a pipeline run by Shell Petroleum Development (nasdaq: PETD - news - people ) Company on the Kula River in Rivers state on Thursday.[22] "We can confirm there was an attack on our pipeline around the Kula area in Rivers state," Precious Okolobo, a spokesman for Shell in Nigeria, said.[2]
Rebels in Nigeria also claimed another attack on a Royal Dutch Shell pipeline.[18] Mobil is the second-largest oil company in Nigeria, after Royal Dutch Shell.[31]
MEND said in a statement that the pipeline attacked Thursday belongs to a Royal Dutch Shell PLC joint venture.[10] The pipeline belonging to a Royal Dutch Shell joint venture is the fourth to be sabotaged in the past week.[28] The group said Friday that the pipeline belongs to a Royal Dutch Shell PLC joint venture.[26]
In Nigeria on Friday, the most prominent armed group in the southern oil-producing region sabotaged a supply pipeline belonging to Anglo-Dutch energy giant Shell.[16] Opec, a group of oil producing countries, has shown itself disinclined to raise quotas to curb rising prices. Supply disruptions, like those in Nigeria and the expected shutdown of the Forties pipeline, have lead to short-term spikes in prices. A weak dollar has also made dollar-denominated assets such as oil and other commodities relatively cheap for some investors.[18] A stronger dollar also makes oil more expensive to investors overseas. "The current thinking is that the U.S. dollar may be bottoming out, and so market participants therefore unwound some of their positions in oil and took some profits," said Victor Shum, an energy analyst with Purvin & Gertz in Singapore, before news of the pipeline attack in Nigeria.[10]
The attack occurred on a pipeline that feeds oil to Nigeria's Bonny Light export terminal, Winzenried added. He couldn't comment on the impact of the attack.[9]
Violent attacks on oil installations have increased in recent weeks, raising concerns that Nigeria's militants are aiming to make good on a promise to cripple the country's petroleum industry.[3] The multinational oil concerns should emphasize direct community partnerships and "collaborative networking rather than individual corporate efforts", which have not paid significantly in checking illegal oil bunkering in the Niger-Delta." Two-time commissioner in Delta State, Barrister Bolatsi Dudu (occasion's chairman) delved into the positive role of the Nigeria media in the country's development since pre-colonial times, urging for its sustenance especially at this crucial period in Nigeria's development.[35] The militants have called for a more equitable distribution of the country's oil wealth. Hoping to quell the violence, Nigerian President Umaru Yar'Adua reached out to the rebels following his April election asking for them to give his administration time to tackle the problems of the delta. Those proposed reforms include changes to the Nigerian economy, particularly its petroleum sector, which generates up to 95 percent of the country's revenue.[3] Increased violence against oil operations in the delta has caused significant drops in the country's oil output, according to the Nigerian government and independent accounts.[3]
The attacks have reduced Nigeria's daily oil output by an estimated 20 percent.[8] ABUJA, Nigeria, April 26 (UPI) -- Oil output in Nigeria is falling despite spiking global demand, officials said.[20]
MEND emerged in early 2006 as the leading group calling for a greater share of Nigeria's oil revenue for the producer region.[23] The group is responsible for kidnapping more than 100 foreign oil workers last year, and has repeatedly attacked oil facilities in the Niger Delta region since late 2005.[27] The southern Niger Delta, where the crude is pumped in Africas biggest oil industry, is traversed with pipes that carry oil from well heads via transfer stations and on to export terminals.[5] "Crude futures recovered (on Friday). after news emerged that Nigerian rebels attacked a pipeline in the Niger Delta," said Sucden analyst Andrey Kryuchenkov.[16]
Overall, violence in the Niger Delta has reduced Nigeria's total production by a quarter in the past two years.[23]
Shell announced a production loss of 169,000 barrels per day following the sabotage of a key supply pipeline in the region.[23] The 700,000 barrel-a-day Forties pipeline carries about half of Britain's North Sea oil production.[33] A BP spokesman said that closing Grangemouth would cause up to 70 platforms in the North Sea to either shut down or reduce production of oil.[18]
Adding to the supply concerns, BP PLC said it will shut down a 700,000 barrel-a-day pipeline system that carries oil from the North Sea to refineries in the United Kingdom.[21] Energy giant BP also prepared to close the neighboring Forties pipeline, which brings in oil from the North Sea and delivers a third of Britain's daily output. It was expected to make the closure decision Saturday.[16] The BP-run pipeline from the Forties oil fields in the North Sea, relies on steam and electricity from the Ineos refinery at Grangemouth in central Scotland.[18]
MEND, which claims it is fighting for a more just distribution of the country's billions of dollars of oil revenue, has attacked two pipelines in the past week.[27] Natural gas futures rose 11.5 cent to $10.905 per 1,000 cubic feet. Oil seemed poised to hit $120 a barrel this week but stalled in its march there on Thursday after the dollar gained against the euro.[11] After oil dipped below $115 a barrel, news of the new threat to supplies put it back on the upward track.[10]
MEND promised more attacks on oil targets in the restive region. "Our candid advice to the oil majors is that they should not waste their time repairing any lines as we will continue to sabotage them," it added. [23] Pipelines crisscrossing the southern oil region of swamps and creeks carry crude oil from wells to transfer hubs and onto export terminals, from where it is shipped to refineries overseas. The pipes are often above ground and unprotected, making them easy targets for attackers.[5] Crime and militancy are intermingled in the region, with gunmen stealing crude oil for resale or robbing banks one day and battling security forces or blowing up oil infrastructure the next.[5]
Regarding soaring crude oil prices, the minister said the price is what consumers are prepared to pay, and that demand is not showing any sign of weakness at the moment.[30] The loss of production has contributed to the spike in world oil prices. Some information for this report was provided by AP and Bloomberg.[8] The latest unrest has heightened fears about supply disruption and helped push world oil prices to new record highs.[15] Several factors have been behind the rally in oil prices. Demand for oil from booming economies such as China and India is growing, while supplies have remained tight.[18]
In other Nymex trading, heating oil futures rose 0.25 cent to $3.2608 a gallon while gasoline prices dropped 2.91 cents to $2.9895 a gallon.[10]
Brent crude futures rose 95 cents to $115.29 a barrel on the ICE Futures exchange in London. Associated Press writer Edward Harris in Lagos, Nigeria, contributed to this report.[10]
Strikes in Nigeria rarely last very long but attacks on the pipelines, which criss-cross the forests and creeks of the delta, are almost impossible to stop.[12] The BBC's correspondent in Lagos, Alex Last, says that strikes in the country rarely last very long, but that attacks on the pipelines which criss-cross the forests and creeks of the delta are almost impossible to stop.[4]
A union official estimated the Exxon Mobil strike is halting about 765,000 barrels a day. [9] Workers at Exxon Mobil Corporation's local joint venture have begun 'a safe and orderly shut-in of production' demanding a pay hike, the company said in a statement on Friday.[7] White-collar workers at ExxonMobil Corp.s local joint venture have "commenced a safe and orderly shut-in of production" to push for more pay, the company said in a statement.[5]
Separately, workers at an ExxonMobil Corp. joint venture in Nigeria cut production by an unspecified amount to demand more pay.[21]
Irving, Texas-based ExxonMobil reports white-collar workers in Nigeria have gone on strike urging more pay.[28]
Fresh off his controversial meetings with Hamas, former President Jimmy Carter appears to be in hot demand among rebel groups around the world. Nigerian separatist militants pose in their war boat 24 February 2006 on the Escravos River in southern Nigeria. [27] The group representing senior oil employees in Nigeria, the Petroleum and Natural Gas Senior Staff Association (PENGASSEN) says negotiations over wages and working conditions broke down Wednesday.[31] A higher dollar also makes oil more expensive to investors overseas. Associated Press writer Edward Harris in Lagos, Nigeria, contributed to this report.[11]
Lawmakers took control of the chambers of the Senate and lower house on April 9 after Mexican President Felipe Calderon introduced a bill that would allow the debt-strapped state oil company Pemex to seek foreign help to boost declining production. [36] Officials had no firm details on the amount of oil production lost but said the were operating at "partial production."[5]
The unrest underscores how unstable crude production remains in Nigeria after recent small signs of progress in the.[32] The company, one of the main operators in the country, has yet to report any production outages from the other attacks.[5] A company spokesperson maintained that the first attack led Shell to declare force majeure on Bonny Light exports for the rest of April and May. The spokesperson said that he had no idea about the possible impact on Soku-Buguma and Buguma-Alakiri pipelines from the second attack which occurred on April 21, 2008.[17] Shell confirmed the attack and said it was trying to assess the extent of the damage to the pipeline.[33]
The attack was prompted by "continuous injustice" in the Niger Delta, according to the letter, which said the "root issues" in the Delta have not been addressed by the "illegal and insincere government." "The ripple effect of this attack will touch your economy and people one way or the other and hope we now have your attention," the letter said. [27] Militants and gangs began attacking oil facilities in the Delta in late 2005 to demand that more oil revenue be directed to impoverished local residents.[8] MEND and other militant groups have been blamed for hundreds of kidnappings since violence in the delta began in 2005.[3]
No further details were immediately available. The United States in January said Iranian boats threatened its warships along a vital route for crude oil shipments. [1]
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1. Oil shoots to $119 on US-Iran tensions
2. Strike, rebel attacks hit Nigerian oil output | Reuters
3. Analysis: Unrest hits Nigeria production - UPI.com
4. BBC NEWS | Africa | Oil firms in Nigeria cut output
5. Nigerian militants report another oil pipeline bombing - International Herald Tribune
6. RTTNews - Market Sensitive Global News, Broker Ratings, News&Analysis;, Global Markets News.
7. RTTNews - Market Sensitive Global News, Broker Ratings, News&Analysis;, Global Markets News.
8. VOA News - Nigerian Militants Claim Another Attack on Shell Oil Pipeline
9. Bloomberg.com: Africa
10. The Associated Press: Oil prices rise after Nigeria pipeline attack
11. The Associated Press: Oil prices rise after Nigeria pipeline attack
12. LIVENEWS.com.au > World > Attacks on pipeline rock oil market
13. Press TV - Nigeria industrial action pushes up oil price
14. UPDATE 1-Nigeria rebels say attack Shell oil pipeline | Markets | Reuters
15. Latest News - SomaliNet
16. AFP: Oil prices rally on supply tensions in Nigeria, Britain
17. Shell Stands By Nigerian Oil Outage of 169,000bpd - Business - redOrbit
18. BBC NEWS | Business | Oil climbs on UK pipeline fears
19. Exxon Plant Affected by Strike in Nigeria; Oil Output Down 50% - International Business Times -
20. Nigeria oil production falls - UPI.com
21. TheStar.com | Business | Oil leaps $2.46 U.S. a barrel
22. Armed Nigerian group confirms attack on Shell pipeline, warns of more sabotage - Forbes.com
23. AFP: Nigerian armed group claims attack on Shell pipeline
24. THISDAY ONLINE
25. BusinessDay. the voice of business - Shell considering relocating from Rivers
26. The Associated Press: Oil pipeline bombing reported in Nigeria
27. ABC News: Nigerian Rebels Call on Carter to Mediate
28. KLTV 7 News Tyler, Longview, Jacksonville |Report: Oil pipeline bombed in Nigeria
29. Oil rises to $118 on Nigeria output cut | Reuters
30. Vanguard Online Edition
31. VOA News - Nigerian Oil Workers Strike Over Pay
32. Free Preview - WSJ.com
33. Investing | Africa - Reuters.com
34. tehran times : Recent Nigeria outage ""not significant"": oil minister
35. allAfrica.com: Nigeria: Make Peace, Devt Your Watchword, Djebah Urges Media (Page 1 of 1)
36. RTTNews - Market Sensitive Global News, Broker Ratings, News&Analysis;, Global Markets News.
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